Chapter 2 — Quiz

Twenty-four questions. Answer before opening the key. All figures are constructed.

Multiple choice

1. Coinsurance is calculated on the:

  • A. billed charge
  • B. allowed amount
  • C. premium
  • D. out-of-pocket maximum

2. A patient has a \$1,200 deductible with \$1,200 remaining and 20% coinsurance. A service is allowed at \$450.00. The plan pays:

  • A. \$360.00
  • B. \$90.00
  • C. \$0.00
  • D. \$450.00

3. Which is not paid to a provider?

  • A. copayment
  • B. coinsurance
  • C. deductible
  • D. premium

4. A plan with no out-of-network benefit except emergencies, no gatekeeper, and no referral requirement is most likely a(n):

  • A. HMO
  • B. PPO
  • C. EPO
  • D. POS

5. Under the birthday rule, primacy is determined by:

  • A. which parent is older
  • B. which parent's month and day fall earlier in the calendar year
  • C. which parent's plan has the lower deductible
  • D. which parent enrolled the child first

6. In a self-funded plan, claims risk is borne by:

  • A. the insurance company whose name is on the card
  • B. the employer
  • C. the provider
  • D. the state insurance department

7. Self-funded employer plans are primarily governed by:

  • A. state insurance law
  • B. ERISA
  • C. the Social Security Act
  • D. the Anti-Kickback Statute

8. Under which contract structure does raising the provider's charge increase the payment?

  • A. flat fee schedule
  • B. percentage of Medicare
  • C. percentage of billed charges
  • D. capitation

9. A fixed monthly payment per attributed member regardless of utilization is:

  • A. a case rate
  • B. capitation
  • C. a per diem
  • D. UCR

10. An eligibility response tells you all of the following except:

  • A. whether coverage is active
  • B. the deductible remaining
  • C. the allowed amount for the service you are about to perform
  • D. the copay for an office visit

11. A provider is in network with an insurer but a claim denies as out of network. The most likely explanation is:

  • A. the payer made an error
  • B. the provider is in network for a different product than the patient's
  • C. the patient's coverage terminated
  • D. the claim was submitted to the wrong address

12. Routinely waiving a Medicare beneficiary's coinsurance as a courtesy may implicate:

  • A. HIPAA
  • B. the Anti-Kickback Statute
  • C. ERISA
  • D. the birthday rule

13. An injury arising out of employment is billed to:

  • A. the patient's health plan
  • B. workers' compensation
  • C. the employer directly
  • D. the patient

14. A patient's out-of-pocket maximum is fully met. A covered in-network service is allowed at \$900.00. The patient owes:

  • A. \$180.00
  • B. \$900.00
  • C. \$0.00
  • D. cannot be determined

15. In an aggregate family deductible design:

  • A. each member's expenses stop at the individual deductible
  • B. no member receives plan payment until the entire family deductible is met
  • C. the deductible resets monthly
  • D. copays do not accumulate

Short answer

16. State the fixed order in which a benefit is applied to a claim line.

17. Give the five conditions that must all be satisfied for a service to be "covered."

18. A patient asks why they pay a premium and still owe money. Answer in two sentences without being dismissive.

19. Name the five payer contract structures and what each puts at risk for the provider.

20. A service is allowed at \$1,150.00. Deductible remaining is \$300.00; coinsurance is 20%; out-of-pocket maximum remaining is \$400.00. Compute patient responsibility and plan payment.

21. (Chapter 1) State both revenue cycle equations and then explain why the premium appears in neither.

22. What are the four things that change at once when a provider is in network rather than out of network?

23. Your practice signed a contract at "115% of Medicare, as amended from time to time." Name two distinct risks in that phrase.

24. Explain, in one sentence each, why plan type predicts access rules but not cost.

Answer key **1.** B. **2.** C — the entire \$450.00 falls within the unmet deductible; the plan pays nothing and the claim was adjudicated correctly. **3.** D — the premium goes to the plan. **4.** C — the EPO is the one that looks like a PPO and behaves like an HMO on out-of-network. **5.** B — month and day only; the year is a distractor. **6.** B. **7.** B. **8.** C. **9.** B. **10.** C — eligibility is not pricing. **11.** B — networks are product-specific. **12.** B. **13.** B. **14.** C. **15.** B. **16.** Allowed amount → copay (if the service type carries one) → remaining deductible → coinsurance on the remainder → out-of-pocket maximum as a ceiling. **17.** It is a benefit under the plan; furnished to an eligible person; during an active coverage period; meeting the plan's medical necessity criteria; and delivered in compliance with the plan's administrative requirements (authorization, network, site of service, frequency). **18.** Model answer: "The premium buys you the plan's negotiated rates and its payment once you've met your deductible — it isn't a prepayment for care. Until the deductible is satisfied, you're paying the plan's discounted rate rather than the full charge, which is worth real money, but it doesn't feel like it and I understand that." **19.** Fee schedule — volume risk. Percentage of billed charges — essentially no provider risk. Case rate — cost per case. Per diem — intensity within a day. Capitation — full population risk. **20.** Deductible \$300.00. Remainder \$850.00; coinsurance at 20% would be \$170.00 — but the out-of-pocket maximum has only \$400.00 remaining. Patient owes \$300.00 + \$170.00 = \$470.00, which exceeds the \$400.00 ceiling, so **the patient owes \$400.00** and **the plan pays \$750.00**. Check: 400.00 + 750.00 = 1,150.00 ✓ *(This is the question most people get wrong: the ceiling binds after the arithmetic, not before it.)* **21.** Charge − Allowed = Contractual adjustment; Allowed − Patient responsibility = Plan payment. The premium is paid to the plan rather than the provider, buys eligibility rather than a service, and therefore never attaches to a claim. **22.** Whether a contracted allowed amount exists at all; whether the provider may balance bill; which cost-sharing tier applies; and what administrative obligations (filing deadlines, appeal process, audit rights) attach. **23.** (a) "115% of Medicare" falls automatically when the Medicare conversion factor falls, with no notice and no renegotiation. (b) "As amended from time to time" incorporates future changes to the fee schedule — and, in many contracts, to the payer's coding and payment policies — unilaterally. **24.** Plan type is a set of *access* rules: whether there is an out-of-network benefit, whether a gatekeeper is required, whether referrals are required. Cost sharing is set independently by the specific benefit design, so an HMO can carry a \$6,000 deductible and a PPO can carry none — which is why you predict from the eligibility response, never from the acronym.